1. Field of the Invention
The present invention relates to frequent shopper systems and more particularly, to frequent shopper systems that reward loyal customers with increasing discounts for regularly visiting a retail establishment.
2. Description of the Related Art
The grocery store industry is a lucrative and highly competitive one. There are approximately 75 large supermarket chains in the United States. The large variety of supermarket chains provides many choices from which to choose from, thus forcing each supermarket chain to aggressively pursue marketing strategies to attract customers and induce customer loyalty to their chain. In an attempt to attract consumers, the grocery store industry has employed a number of different promotions. Despite the supermarkets efforts, customer loyalty is no longer inherent due to the increased competition.
The conventional methods of attracting and developing customer loyalty used by a supermarket chain include television and radio advertising to promote their stores. In addition, some stores offer free standing inserts (FSIs), coupons, and loss leaders in order to attract consumers. These strategies, however, erode the gross margin without retaining the stores best customers. Furthermore, weekly advertised specials and coupons by their very nature only attract customers for a given time period. Since the specials or discounts vary from week to week, there is no guarantee or likelihood that a store will be discounting exactly what the consumer is interested in buying every grocery trip. Most consumers, therefore, scan the weekly advertisement of every grocery store in their area before doing their weekly grocery shopping and choose to go to the store that most meets their needs.
Many supermarket chains also have established “superstores” to provide increased convenience for the customers with at least the intent to attract more consumers. These superstores attempt to provide one-stop shopping for consumers by providing a greater variety of goods and services typically not found in conventional supermarkets, such as bakeries, video rental, banking services, automotive parts and recreational equipment. The advantage that these superstores have to attract customers, however, has been tempered by the increased popularity of these type of stores among the different supermarket chains.
Another attempt to attract customers is the implementation of a frequent shopper card program. This program provides a customer with a frequent shopper card that is presented at the time of purchase. Presentation of the card enables the customer to receive special weekly discounts on specific items purchased. Essentially, these programs act as a paperless coupon redemption system.
The frequent shopper card programs are also used to track a customer's shopping habits. The frequent shopper card includes a customer identifier that enables the retailer to identify, record and track a frequent shopper's purchases. The customer's shopping history is then used to perform targeted marketing functions, such as compiling mailing lists and sending out advertising material or printing out point-of-sale (POS) coupons to the customer.
While the frequent shopper card program may succeed in attracting the consumer to the store on an occasional basis, the program does not successfully ensure the loyalty of the consumers. Since most stores have a frequent shopper card program, consumers simply acquire one of these cards for every chain in their area and go to the one that offers the better specials on any particular week or is the most convenient at any given time. The program does not provide any incentive (i.e., reward or penalty) for visiting the store on a consistent basis.
With the considerable number of supermarket stores in any given area, there exists a need for systems and processes which provide a supermarket the ability to reward a customer for consistent patronage to the supermarket and to promote and reinforce the customer's loyalty.